You will know what a commercial mortgage is and when you need one.
When it's necessary and what are the conditions for a loan?
What are the advantages and how can you profit from them.
A commercial mortgage is a loan to basically finance commercial property like an office building or a store. Like a conventual loan a certain level of security is mandatory for you to be considered creditworthy.
Usually this kind of loan is secured by a property which is not used for living in it or private use. A commercial mortgage can be up to 25 years. There are also shorter terms available, even just for a few weeks. It depends on your liquidity and the total of the mortgage.
A commercial mortgage is needed for bigger amounts of loans. For a loan more than £25,000 the lender or the bank needs more security from you to ensure a garuanteed repayment.
Often your commercial property gets considered as a security of about three quarters of the total amount. The rest can be cash, for example. If you don’t have the cash other equities like other properties can come into question.
The advantage of a commercial mortgage in contrast to a trademark mortgage is that you keep in full ownership of your business by not selling interest and parts of your company. There are no shareholders to please and therefore you can grow your business with the speed you want it to grow.
Another big advantage is that with time your commercial property as such gains in value so that the mortgage payes of itsself. Also you can sell the property at a much higher price than when you first bought it and take the profit to reinvest in your business.
Generally, a commercial mortgage gives you flexibility in terms of the interest. You can choose between a fixed-rate loan or a variable rate and switch in between them in the first 10 years. This way, you have less bounderies and more opportunities for planing further in the future.